Can Employees Already Invoke the EU Pay Transparency Directive? What Employers Need to Know Before National Implementation
Publication: ZRVP
Although the EU Pay Transparency Directive (Directive (EU) 2023/970) (the “Directive”) was adopted by the European Parliament and the Council of the European Union on 10 May 2023, and the deadline for its transposition into national law has already expired, its legal effects may nevertheless arise even in the absence of national implementing measures.
According to the case law of the Court of Justice of the European Union (CJEU), directives that have not been transposed within the prescribed deadline, or that have been incorrectly transposed, may still produce legal effects for Member States. One such effect is the doctrine of upward vertical direct effect, under which an individual may invoke before a national court an individual right conferred by a directive against the State where the directive has not been transposed, or has been transposed incorrectly or incompletely, provided that the relevant provisions are unconditional and sufficiently clear and precise to be applied.
By virtue of the doctrine of upward vertical direct effect, an employee working for an employer that qualifies as an emanation of the State (such as a wholly state-owned or majority state-owned undertaking) could request from the employer the information to which the employee is entitled under the Directive.
The Directive does not, however, have downward vertical direct effect, meaning that its provisions cannot be relied upon by the State against an individual. Since it is the State itself that bears the obligation to transpose the Directive into national law, it cannot derive an advantage from its own failure to fulfil that obligation.
Likewise, the Directive does not have horizontal direct effect, meaning that it cannot be relied upon by one private party against another. Consequently, an employee of a private-sector employer cannot directly invoke the provisions of the Directive against their employer.
Nevertheless, the Directive is not entirely without legal relevance in disputes between private parties. Its provisions may have an interpretative effect, enabling national courts to interpret existing domestic legislation in light of the Directive in areas already governed by national law, such as equal treatment, non-discrimination and equal opportunities between women and men.
When adjudicating such disputes, national courts would not apply the provisions of the Directive directly to the employment relationship between the employee and the employer. Instead, they would apply the principle of consistent interpretation, construing domestic legal provisions governing equal pay, non-discrimination and equal opportunities in a manner consistent with the objectives and criteria established by the Directive.
In practice, national courts have shown a degree of caution in interpreting domestic legislation in light of EU directives, considering in certain cases that such an approach could amount to the indirect application of a directive in disputes between private parties.
In light of the Directive, and pending its transposition into national law, employers should adopt a proactive and preventive approach by reviewing their pay structures, internal job evaluation criteria and remuneration systems. In this regard, particular consideration should also be given to the job evaluation and classification methodology published in March 2026 by the European Institute for Gender Equality (EIGE) and the European Commission.
The methodology establishes a standardised framework for the objective evaluation of jobs, eliminating gender bias from the assessment process. Under the European methodology, the value of a job should be assessed consistently by reference to four core criteria: skills, responsibility, effort and working conditions. However, the evaluation process should not be confined to these overarching criteria alone. Rather, it should include the development of specific sub-criteria and indicators designed to facilitate a more detailed, rigorous and objective assessment of the value of work.